Chris Reed, Associate Director of Global Sales North America for Langham Hospitality Group

Wayne Robinson, CMP, Assistant Vice President of Programs and Exhibits for FM Global

Gary Slavonic, MAS, CPIM, President of Top Brands, Inc.

Sheree Thornsberry, General Manager of Blackhawk Engagement Solutions
Janet Traphagen, President of Creative Group, Inc.; Chair of Incentive Research Foundation

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Every year, Incentive gathers a group of professionals from all sectors of motivation and engagement to talk about the state of the industry. This summer, 12 participants gathered at the spectacular St. Regis New York on Fifth Avenue to discuss topics ranging from the growing power of experiential awards to the increasing number of non-sales employees included in incentive programs, as well as what's happening in the merchandise, gift card, and travel awards categories. What follows are highlights of that discussion.

STATE OF THE INDUSTRYINCENTIVE:What is the state of the incentive industry now?

WAYNE ROBINSON: As an end user, I see a good market for incentives right now. I've never faced board challenges internally, [but] there was a time when I would actually walk into the C-suite with a proposal, not letting them know how much it would cost. I can't do that anymore. I've got to let them know how what we're spending money on ties into company objectives, into company themes.

Because we're so driven by world events [as a commercial property insurance company] that's more challenging than, "What are we going to do that's new and different, and how are we going to incent not only our clients, but also our internal sales force and our brokers?" We have offices in 30 countries. The company's doing well, but world events and how they affect our market, our bottom line … will affect our incentives.

CHRIS GALLOWAY: We work on the solution-design side of programs for clients -- from the inception of the program all the way through to the execution and reward. We are seeing new business, and by that I mean programs that didn't exist before. That's welcome and a sign of growth in our industry.

There's a shift more towards employee incentives, as opposed to employee recognition. We are seeing a few of our clients moving frontline service employees onto full-year incentive plans.

MICHELE LEE: In the last few years, it's been trending upward. I've seen a lot of requests for proposals (RFPs) -- not just for Singapore, but for Asia in general, so it's very competitive for us, but the future looks bright.

COSIMO BRUZZESE: Some [industries] are returning to the old days of incentives -- we've done a few programs now that include full-blown concerts for high-end groups as small as 60 guests, which we haven't seen in seven years. I think the biggest shift we're seeing is that the focus now is less and less on the traditional incentive elements like the décor. The experience is the primary focus. What is the Instagram moment? What is the Facebook moment?

KAROLYN GRAVES-RHODES: There's a younger generation of incentive winners, so you have to shift what you're doing to keep them engaged.

INCENTIVE: According to The Conference Board, U.S. CEOs' top concern for 2016 was: "What is the role of inclusion in fostering a culture of innovation?" How can incentive, loyalty, and motivation programs help?

MARY MACGREGOR: A culture of innovation starts with a culture of inclusion and a connection to the organization. Incentives and recognition programs are a prime tool and a driver that can really help create that connection. Those programs need to be diverse and they need to be broad. It's not just the sales channels, it's also the frontline -- those individuals in the call centers on the phone with the customers, those account managers who are responsible for retention. Make sure that the programs are broad and diverse enough and I think, ultimately, that inclusion does lead to a culture of innovation. When the programs are inclusive, we're also seeing the middle-of-the-pack incentive participants perform better, and the upside is greater for the clients.

JANET TRAPHAGEN: An Incentive Federation study demonstrated that organizations that reward idea generation produce 250 percent more ideas than those that don't recognize it. In this industry, as we all know, what gets recognized gets done.

DENISE DORNFELD: We just ran a small incentive for a company that rewarded the people who produced the most cost-saving ideas or the ideas that brought the most innovation to the firm. That's how they earned the award. It was an added incentive they gave so that everyone could experience it. I thought that was very ingenious on the company's part.

Sheree Thornsberry of Blackhawk
Engagement Solutions says research
shows that engaged employees are
more innovative

SHEREE THORNSBERRY: We've done some research that shows a correlation between the level of employee engagement and innovation. And obviously, the higher the level of engagement, the better innovation the company is going to see. Traditionally, innovation is an employee's second job after servicing clients or whatever his or her primary responsibility is. How do you bring innovation to the workplace? I think focusing on engagement, and using incentives to do that, is really important.

INCENTIVE: Do those CEOs understand the importance of incentives?

Gary Slavonic of Top Brands, Inc.
says the incentive business has come
a long way since 2008-2009, when a
lot of CEOs would say, "You're lucky
to have a job"

GARY SLAVONIC: We've gone a pretty long way from 2008-2009, when a lot of CEOs would say, "You're lucky to have a job," and that's about as far as they looked at it. Now, they're certainly starting to see that they need to do as much as they can to engage workers and retain everybody -- especially the good performers.

BRUZZESE: The 2016 Society for Incentive Travel Excellence (SITE) Index survey found that 90 percent of CEOs now acknowledge the importance of incentives, but less than 50 percent understand why they work. The goal is to increase the level of understanding of the importance of incentives.

DORNFELD: We've got to find the data to support that and we've got to supply them with it. They need their employees and they need them to be engaged in order to deliver to the stockholders, but the "why" is missing. I found that statistic alarming, but so true.

INCENTIVE: More companies seem to be including non-sales employees in their incentive programs. Why are they doing that?

CHRIS REED: We're breaking the traditional barriers. We're relying on each other in different operational departments, so it's not just that same top 10 percent that goes to a destination every year. Now the goals are tied in from sales and operations together. Big organizations are starting to recognize people who were never really recognized in that way before.

GALLOWAY: We're seeing an increase in employee incentives as opposed to employee recognition. One client is a branch-based distributor, and they run two incentive programs. One is for sales, but the team incentive is what's providing the most growth, the most impact. In each branch, everyone from the warehouse manager to the front desk administrative person is awarded if the branch reaches its goal.

Another client, a residential and commercial services business, traditionally took the top 3 or 4 percent of their organization, primarily the sales organization, on the incentive trip. But their service organization is half the company and has the lowest levels of engagement. So they created a second-tier program, a points-based program. In addition, service staffers can qualify now for the big travel award. They're broadening the scope and they're leveling the playing field for everyone. They understand that revenue growth starts by fixing your leaky bucket -- customers that keep falling out for bad service. Service is critically important to growth.

INCENTIVE: How are Millennials changing the way we see incentives?

TRAPHAGEN: At the Incentive Research Foundation's (IRF) Annual Education and Incentive Invitational conference this summer, we did a Millennials panel -- they range from 18 to 35, so now there are newer Millennials and there are more senior Millennials with management-level responsibilities. One man got a little passionate and said, "You keep telling us we're entitled. You keep telling us we don't act like grown-ups. That's because that's how you treat us. Stop treating us like we're fragile and treat us like professionals." Engagement is a two-way street. I think we have to treat them like adults, and say, "We're expecting you to engage with us just as much as we are going to commit to engage with you."

THORNSBERRY: Millennials value what they do outside of work as much as what they do at work. I have a real respect for that, coming from a generation that spends a lot of hours working and may not always have great work-family life balance. It's a different perspective.

ROBINSON: We're seeing more of these community give-back programs -- not just build-a-bike but going somewhere, painting a school, and things of that nature. Actually, people in our planning committees are asking us to find teambuilding activities that mean something.

MACGREGOR: The interesting part of this conversion is that the broader population is just as interested in participating in meaningful activities -- it's not just Millennials, though they are driving it. The opportunity to earn an incentive trip doesn't mean that at my phase of life I actually want to go with this group of people to this destination. I'd love a choice of six or seven places. You might want to go hiking in Machu Picchu and I'd like to take my grandkids on a cruise.

TRAPHAGEN: All of our participants are hungry for an authentic experience and to really immerse themselves in the destination at its most local level. That's not exclusive to Millennials.

ROBINSON: I think it's the more experienced attendees who want authenticity, they've been there and done that. It seems like the further out of the box a program goes, the more interest you get now. The Millennials haven't done as much or experienced as much yet, so just being in a destination still might be a big thing.

INCENTIVE: Another CEO top-three concern The Conference Board uncovered is promoting a culture of engagement. That's a core strength of this industry. What can we tell those CEOs?

GALLOWAY: From my perspective, the very definition of incentive gets to why the programs exist, not the end result. Incentive programs, designed right, can align values from the top of the organization right down to the frontline. When they do, everyone's running in the same direction and they get the best results, so to me the design of the program impacts engagement.

TRAPHAGEN: When we are talking to our clients, to that C-level, about the culture of engagement, I think on an intellectual level, some of our clients really understand that. There's been a lot of research showing that engagement matters -- it boosts profits and morale. But often, when we're talking about strategies, it's an awkward situation because the client thinks we're going to help them create a culture. That's not what we do. We create programs that help shift or reinforce a culture. Culture is not imposed. Culture is what's there and a company's culture starts at the top.

THORNSBERRY: Not enough CEOs understand how impactful culture is in an organization. That plays to the strategic business objectives and knowing what their culture is and then, if there needs to be a change, how to make those changes. That's a place where we can add value and connect the dots with employee engagement, and then with incentives.